Turkey is now in the middle of both an alarming currency crash and a heated election campaign. The two things are not unrelated. Some observers argue that Erdogan's decision to stage presidential and parliamentary votes on June 24 — months ahead of schedule — and explicitly meddle in monetary policy has contributed to the rapid decline of the Turkish lira, which lost as much as 5.5 percent of its value on Wednesday alone.
On Sunday, for example, Erdogan staged a huge rally in the Bosnian capital, Sarajevo. Though it was not formally part of his election campaign, the speech was clearly aimed at a domestic audience. The Turkish leader railed against European countries like Germany, his frequent boogeyman, saying that “European countries claiming to be the cradle of civilization have failed.”
Erdogan also extolled the old Ottoman legacy in the Balkans and hyped up the meaning of the coming election. Voters would “not only be choosing a president and deputies” in parliament, he said, but “making a choice for our country’s upcoming century.”
Critics warned that such grandstanding abroad had grave repercussions. Erdogan likes to cast himself as a leader of the Muslim world, and he received prominent backing during the visit from Bakir Izetbegovic, the Muslim member of Bosnia's tripartite presidency.
But, as political scientist Jasmin Mujanovic observed, the Bosnian trip risked upsetting the already delicate balance of power in a country that is still struggling to fashion a liberal democracy. “It gives fodder to the surging far-right in the EU which wants nothing more than to reject Bosnia’s already dubious aspirations for EU membership by claiming, falsely, that the country is a hotbed for Islamists and Muslim radicals,” wrote Mujanovic for the Balkan Insight website. “The optics of Erdogan’s visit to Sarajevo, in short, were terrible.”
“Turkey is neither an adversary in the conventional sense nor completely an ally,” the Center for Strategic and International Studies noted in a new policy brief on how Washington should deal with Ankara. “Ties are unlikely ever to return to the intimacy of the Cold War, and even so, a formal break in the relationship is unlikely.”
Erdogan's move to call snap elections led to a brief rally in Turkish markets, but a recent set of remarks before investors in London — where he said he wanted to tighten his own grip over monetary policy — sent the lira into a deeper tailspin.
“The president’s apparent recklessness with the currency has left many observers baffled,” reported Laura Pitel of the Financial Times. “Durmus Yilmaz, a former central bank governor who advises the opposition IYI party, suggested that the president may be deliberately crashing the lira to create a sense of national crisis to boost his support in elections.”
In a familiar move, Erdogan's camp has blamed the economic mess on shadowy opponents. On Wednesday, a host of his allies, including his son-in-law and a deputy prime minister, pinned the currency crash on outside actors and enemies of the state. That's standard rhetoric in Erdogan's Turkey, where the president has built a majoritarian government by pandering to nationalist sentiment and bemoaning foreign plots and conspiracies against the nation.
“The opposition groups are 'proxies' for outside actors conspiring to undermine Erdogan's agenda of making Turkey great again,” Soner Cagaptay, author of a book on Erdogan's rise to power, told Today's WorldView. “Not even an economic meltdown would change countywide perceptions of Erdogan. Half of the country hates him, and thinks he can do nothing right. But at the same time, the other half adores him, and thinks he can do nothing wrong.”
Such tactics may have their limits. Erdogan is no shoe-in for reelection, and most signs point to him amassing at best a razor-thin majority, as he did in a controversial 2017 referendum that further expanded his presidential powers.
In a polarized landscape, analysts warn of Erdogan's overreach. “Erdogan can control many things, but the dollar is one thing he cannot,” said Gonul Tul of the Middle East Institute in Washington. “His tendency to monopolize economic financial decision-making has become a liability. Turkish lira’s free fall can cost him the elections.”